LONDON: Two major PR agencies have bought themselves out of holding company
ownership, even as a flurry of deals signal that acquisition is set to
rise to pre-recession levels in 2011.

The UK’s Freud Communications is understood to have repurchased the
50.1 per stake in the company that has been owned by Publicis Groupe
since 2005, according to a report in the Sunday Times. Meanwhile, US
agency MWW has bought itself back from Interpublic Group after a decade
of ownership.

MWW reported revenues of almost $39 million in 2009, according to the Holmes Report 2010 Global Rankings.
In the same report, Freud’s 2009 revenues exceeded £22 million. The
Economist analyses Freud’s reasons for buying back the shares here.

The Freud/Publicis split will surprise few observers of the PR industry – this post explains why.
Next week, meanwhile, the Holmes Report will carry an interview with
MWW founder and CEO Michael Kempner, explaining his reasons for the
buyout.

Ironically, the deals come as acquisition activity continues to heat
up. This week alone, WPP has announced its purchase of Blue State
Digital. Meanwhile both Ketchum and Racepoint Group have upped their
investment into Asia; Ketchum taking a majority stake in its Ketchum
Newscan Greater China operation, and Racepoint acquiring PPR Asia.

It is unlikely the deals will stop there. Ketchum is understood to be
close to agency purchases in India and Singapore, while a number of
firms – including Edelman, MSLGroup, Hill & Knowlton, GolinHarris
and Grayling – are understood to be actively seeking acquisitions
across the world.

Rick Gould, managing partner at agency M&A specialists StevensGouldPincus, told the Holmes Report last year that
the agency M&A market was poised for a major rebound. His
prediction appears to be coming true, with the second half of 2010
punctuated by a number of deals. MSLGroup, Edelman, MDC Partners, Hill
& Knowlton and Next Fifteen have all made significant purchases in
recent months, across both mature and emerging PR markets and
disciplines.